European labour markets: inclusivity and productivity

Economies across Europe should aspire to use the talents of their entire populations. Utilising residual capacity in the labour market, through an increased employment rate and an improved allocation of skills, represents a key opportunity to boost economic performances across Europe.

A low employment rate is testament to a loss of potential for employers and countries alike. With only two thirds of the European working-age population in work, there remains substantial scope to improve performances (Dolphin et al 2014). Mothers, older workers, recent immigrants, ethnic minorities, young people, people with disabilities and low-skilled workers all face disproportionately low employment rates across Europe (ibid). This report considers what scope there is to boost employment outcomes for one such group – mothers – as part of a broader strategy for increasing inclusivity and productivity in European labour markets.

Gender gap

There is a significant gender employment gap across Europe. Despite decades of increased educational participation and attainment among women, as well as legislative guarantees of maternity and parental leave, female employment still lags behind that of men. Averaging across the 28 EU member states (the EU28), the percentage-point gap between male and female employment stood at 11.7 in 2013 (Eurostat 2014). This represents a decrease since 2002, when the gap stood at 17.4 percentage points, which averages out at about half a percentage point per year (ibid). However, our analysis shows that since 2007 this reduction in the gender gap has not been driven by rising female employment rates as it was previously. Instead, it can be almost entirely accounted for by falling levels of male employment in the wake of the global financial crisis.

The female employment rate in Europe has increased by less than four percentage points in the past 10 years, and has flatlined at around 62.5 per cent over the past six years (Eurostat 2014). It is difficult to be sure of the extent to which this can be explained by the cyclical effects of slow-moving European economies, as opposed to a more structural and enduring ‘ceiling’ to female employment. It does suggest, however, that it would be complacent to assume that general economic recovery alone will be sufficient to significantly increase the proportion of women in work. Women – and especially mothers – face additional barriers to gaining and remaining in employment.

Promoting gender equality through flexible working

Much of this gender disparity in employment outcomes is due to persistently low employment rates among mothers. In the UK, this disparity accounts for 90 per cent of the gap between male and female employment rates (Ben-Galim 2014). To contribute to previous work by IPPR and others on how women might gain greater access to the labour market, this report looks at the role that ‘flexible working’ can play in promoting and retaining mothers in work. However, we recognise that flexible work is just part of the answer: a broader strategy for better supporting mothers into the right types of work is needed, one that also includes measures such as expanded affordable childcare and improved parental leave.